Arizona Real Estate License Practice Exam 2025 - Free Real Estate Practice Questions and Study Guide.
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Question: 1 / 1505
If the principal amount is $50,000 and the interest rate is 11%, what is the annual interest?
$500
$550
$1,100
$5,500
To determine the annual interest from a principal amount of $50,000 with an interest rate of 11%, the formula to use is:
Annual Interest = Principal Amount × Interest Rate.
In this scenario, the principal amount is $50,000, and the interest rate is 11%, which can be expressed as a decimal (0.11).
When you multiply these together:
Annual Interest = $50,000 × 0.11 = $5,500.
This calculation clearly shows that the annual interest earned on the principal amount at that rate is indeed $5,500. This amount reflects the true return on investment for that principal over one year at the specified interest rate.
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